Gaza meeting comes three days before interntional donor conference, where Palestinian government will seek $4 billion in aid.

by Associated Press 6 October 2014

Palestinian children play on a mini ferris wheel on October 5, 2014 in the Shejaiya neighborhood of Gaza City during the Muslim holiday of Eid al-Adha. Photo by AFP

The Palestinian unity government will hold its first Cabinet meeting inGaza this week, a key step toward taking charge of reconstruction efforts in the war-battered territory, a senior official said Monday.

The Cabinet will convene Thursday, said Deputy Prime Minister Mohammed Mustafa, three days before an international pledging conference where the Palestinian government will seek $4 billion in aid for Gaza, hit hard in a 50-day war this summer between Israel and Hamas.

Donor countries view the unity government of independent experts, led by Western-backed Palestinian President Mahmoud Abbas, as key to any reconstruction plans. Hamas, which is shunned as a terrorist group by the international community, has governed Gaza for the past seven years.

The purpose of the Gaza meeting is to “see the situation on the ground and to send a message to the donors’ conference that the government is ready to start reconstruction soon,” Mustafa told The Associated Press.

Hamas seized Gaza from Abbas in 2007, prompting a border closure of Gaza by Israel and Egypt, enforced to varying degrees over the past seven years. After Egypt tightened the closure last year and stepped up its destruction of cross-border smuggling tunnels, Hamas began experiencing severe financial difficulties that made it increasingly difficult for the group to govern.

Earlier this year, Hamas agreed to hand over authority to a temporary unity government reporting to the West Bank-based Abbas, though it refused to disband its security forces. Other key issues remained unresolved, including the fate of more than 40,000 employees hired by Hamas after 2007. The unity government has not yet started operating in Gaza.

Mustafa said that’s about to change. “The government is for both the West Bank and Gaza, and it’s time to start operating in Gaza despite the difficulties,” he said in a phone interview.

In the West Bank, which Israel seized in the 1967 Arab-Israeli war, Palestinians have limited self-rule in 38 per cent of the territory.

The unity Cabinet, headed by Prime Minister Rami Hamdallah, will meet in Abbas’ former residence in Gaza, Mustafa said. Abbas has not set foot in Gaza since the Hamas takeover, and it remains unclear when he might return to the territory.

During the latest Israel-Hamas war, which ended in late August, Israel launched thousands of airstrikes at what it called Hamas-linked targets, while Hamas fired thousands of rockets and mortars at Israel. More than 2,100 Palestinians were killed, the majority civilians, according to the UN Israel lost 66 soldiers and six civilians.

More than 60,000 homes and more than 5,000 businesses were destroyed or damaged, according to joint assessments by the Palestinian government and the United Nations.

One of the key challenges will be to get construction materials into blockaded Gaza.

Under the closure, Israel has restricted imports of building materials to prevent cement and steel from being diverted by Hamas for the construction of bunkers and attack tunnels. During the war, Israel discovered and destroyed more than 30 such tunnels.

Mustafa said some construction materials would enter Gaza this week during what he described as a test phase, but did not elaborate. UN officials have said they have negotiated a deal with Israel under which imports would gradually increase, while UN inspectors and security forces loyal to Abbas will conduct spot checks in Gaza to ensure no shipments are diverted.

In another step, some 3,000 troops loyal to Abbas will take up positions in Gaza soon, Mustafa said, without elaborating.

Restrictions on Gaza turn reconstruction plans into science fiction

The strip now has two governments. One run by Hamas and the other by the Palestinian Authority.

by Amira Hass 23 September 2014 Haaretz

A tent stands amid the destruction of buildings in Beit Lahiya, northern Gaza Strip, August 7, 2014. Photo by AP

Ten of the 16 members of the Palestinian unity government are abroad this week. Four of them — Prime Minister Rami Hamdallah, who also serves as interior minister; Foreign Minister Riad Malki, Finance Minister Shukri Bishara and National Economy Minister Mohammad Mustafa — are in New York for the twice-yearly meeting of donors to the Palestinian Authority, on Monday. The sessions will focus on preparing for a special donors’ conference, in Cairo on October 12, on the reconstruction of the Gaza Strip.

A task force headed by Mustafa last week estimated the cost of postwar reconstruction in the territory at around $4 billion over three years. Contributing to the assessments were the United Nations Development Program and local teams that included representatives from local mosques, some of whom belong to or are affiliated with Hamas.

The Ad Hoc Liaison Committee was founded in 1993 to coordinate the distribution of international development aid to the West Bank and the Gaza Strip, in preparation for the establishment of an independent Palestinian state in these territories. But for many years the committee has been putting out fires instead of setting development goals, financing the PA’s budget deficit and helping the growing number of Palestinians in need of direct aid.

Four main reports were sent to participants in advance of Monday’s meeting, one each from the PA, the International Monetary Fund, the World Bank and the UN Special Coordinator for the Middle East Peace Process. While they differ in wording and emphasis, all contain two predictable conclusions: Massive international aid will be needed to rebuild the Gaza Strip, and the effort must be carried out by PA institutions only, in coordination with international organizations and private contractors. In their reports, the IMF and the World Bank stress that donor states must continue to contribute to the PA’s budget.

All the reports say Gaza cannot be rebuilt without ending the blockade on the territory, or at least (in the IMF report) easing restrictions on movement. The UN, PA and World Bank reports all say that rehabilitating the Palestinian economy will require Israel to remove its restrictions on development in Area C, the part of the West Bank under full Israeli control. They also deem the continuation of the Palestinian unity government an essential precondition for reconstruction.

These references to Area C and the unity government in the context of reconstructing Gaza and rehabilitating the economy turn these reports from economic and political texts into works of science fiction. First, Israel has made it clear that its policy on Area C remains unchanged. Second, the unity government currently exists on paper only.

Senior Fatah and Hamas officials began discussions in Cairo on Monday on the renewed crisis between the ostensibly reconciled organizations. The still-unpaid salaries of some 27,000 Gazan civil servants appointed by the Hamas government was high on the agenda. The 2011 Cairo agreement on which the unity government is based specified a method and timetable for resolving the problem, but Hamas hasn’t given the unity government time to follow the schedule and accuses it of abandoning the workers.

A senior PA official, speaking on condition of anonymity, said Hamas deliberately turned the salary issue into a crisis, adding that the PA intends to find a way to hire these employees itself and pay their wages. Both the IMF and the World Bank vehemently oppose any increase in the PA’s payroll. It’s not clear how this contradiction can be resolved.

Even if the salary problem is somehow solved, the unity government cannot operate from Cairo. The cabinet ministers who travel to New York, Mecca and Brussels can’t cross the 70 kilometers separating Ramallah from Gaza: Israel bars them from doing so, due to its opposition to the unity government.

Last week, for instance, the Palestinians reported that Israel barred the Palestinian Education Minister, Khawla Shakhshir, from going to Gaza for an event marking the new school year. Israel’s Coordinator of Government Activities in the Territories told Haaretz that technical problems and time pressures led to Shakhshir’s permit being issued too late.

It’s not unusual for Palestinians to report that Israel’s Civil Administration in the West Bank has rejected a request for a travel permit, though in this case the agency says the permit was approved. But conflicting stories, or situations in which a permit is granted only long after the requested date, are part of the overall picture of restrictions on Palestinian movement and of Palestinian dependence on Israel.

Either way, Israel’s rejection or belated approval of the permit had a Palestinian ally that saw the minister’s trip as undesirable: Ziad Thabet, a deputy minister of education appointed by the former Hamas government in Gaza, said Shakhshir did not coordinate her planned visit with him. That was interpreted as a threat that Hamas’ forces, which continue to operate in Gaza, would not allow her to enter and tour Gaza’s schools.

The issue of coordination between ministers in Ramallah and deputy ministers or ministry director generals in Gaza recalls Akira Kurosawa’s “Rashomon.” PA officials in Ramallah say they want to coordinate actions with Gaza, but the Hamas high command in Gaza doesn’t share necessary information with them, including its distribution of money or food sent by the PA in Ramallah. Senior Hamas officials in Gaza claim the ministers in Ramallah ignore them. Physical proximity would aid cooperation, but travel between the West Bank and the Gaza Strip is difficult, even in the event that Cairo permitted officials to enter the coastal territory via the Rafah border crossing with Egypt.

Thus in practice, two separate bureaucracies operate in Gaza, that of the former Hamas government and of the new Palestinian unity government. “The current situation of dual administrative systems, resulting in complicated public service arrangements, is not sustainable,” the World Bank warned in its report.

The IMF report said that after Operation Cast Lead in early 2009, donor states did not fulfill their pledges to finance Gaza’s reconstruction, primarily due to Israeli restrictions on bringing construction materials and goods into the territory. The UN is discussing new arrangements for bringing such materials into Gaza, and Israel has agreed to them. But without freedom of movement for officials between Ramallah and Gaza City, the unity government will be hard put to genuinely work together.

Palestinian economy plummets

Nearly two-thirds — 63.3 percent — of Gazans aged 15 to 29 were unemployed in the period preceding Operation Protective Edge, the IMF and World Bank reported, and 45 percent of the territory’s workforce as a whole was jobless. In the West Bank, these figures were 25 percent and 16 percent, respectively. A weighted average of these numbers produces an overall Palestinian unemployment rate of 26.3 percent, rising to 39.5 percent for young people.

“As international experience and recent history in Gaza shows, such a dire situation may fuel further violence,” the World Bank report warned.

The Palestinian growth rate fell from 6.3 percent in 2012 to 1.9 percent in 2013. And it’s only thanks to Gaza’s cross-border tunnel economy, which hadn’t yet been destroyed by Egypt at that point, that the decline wasn’t even more drastic. Growth in Gaza fell from 7 percent to 6 percent, while in the West Bank, growth plunged from 6 to 0.5 percent.

In 2014, the IMF predicts that the West Bank economy will contract by a further 3.7 percent and the Gaza economy by 15 percent. “Political uncertainty and restrictions on movement and access are the main reasons why the Palestinian economy is unable to take off,” the World Bank report said.

The PA’s report, “Rebuilding Hope,” notes that 48 percent of the PA’s regular budget goes to wages and social benefits such as welfare payments in Gaza. But since the Hamas-Fatah political rift in 2007, only 3 percent of PA tax revenue has come from Gaza, down from 45 percent before 2007.

Last year’s World Bank report concluded that Israel’s policy of preventing Palestinian development in Area C results in an annual loss to the Palestinian economy of about $3.4 billion.